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2004 Hopkins and Company, LLC
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Victory
Almost two hundred athletes spent the month
of July riding in Le Tour de France.
For the unprecedented sixth time, Lance
Armstrong won the race. We’ve been thinking about what it took for cancer
survivor Armstrong to achieve this remarkable success. Throughout this issue
we explore the notion of victory and what it takes to achieve unprecedented
success. As you read this, think about the obstacles to victory in your life,
and what you need to do to overcome those obstacles.
Fifteen new
books are rated in this issue, beginning on page 5. Three books are highly
recommended with four stars, nine are recommended with three stars, two are
mildly recommended with two stars, and one tedious book earned a single star.
You can also visit our complete 2004 bookshelf at http://www.hopkinsandcompany.com/2004books.html
and see the rating table explained as well as explore links to all 2004 book
reviews. You can also check this same bookshelf to see what other books we’re
reading or considering. No new books were added to the “shelf of possibility”
during July, as we try to catch up with our backlog. If there’s something
missing from the bookshelf that you think we should be considering, let us
know at books@hopkinsandcompany.com.
Sticking
One lesson from Lance
Armstrong involves his choice of Le Tour over other profitable cycling
opportunities. Instead of spreading himself over lots of races around the
world, Armstrong focuses intently on what it takes to succeed at the premiere
event. Executives choose to enter or exit lines of business for a variety of
reasons. In recent weeks, we’ve noted the divergent strategies of high
profile companies in answering the question, “What business are we in?” When
the Boeing board called Harry Stonecipher
out of retirement to clean up after former CEO Phil Condit, who resigned under fire, it was hard to guess
whether the new leader would be perceived as part of the problem or part of
the solution. Seven months later, according to a long profile in Barrons (7/5) (http://online.wsj.com/barrons/article/0,,SB108880880450354510,00.html),
it appears that he’s leading solutions. One key to both Armstrong’s and Stonecipher’s success is the intensity they bring to
their work. At meetings, “I... insist that we tackle the toughest issues on
the agenda first, rather than engage in polite warm-ups and delayed
decision-making.” He reduced the number of direct reports to the CEO from 30
to 11. Here’s one aspect of his approach to focusing the organization on what
it does best: “Stonecipher believes fervently in
the cliché of sticking to core competencies and not competing against
important customers like GE Capital and other major airplane-leasing firms.
He scrapped plans to build Boeing Capital Corp. into a diversified finance
arm. BCC is, in fact, selling some $2 billion in noncommercial aviation
assets to GE. It is likewise ratcheting down the growth rate of its $10
billion in airplane loans and leases, returning to a role as mere lender of
last resort for customers.” With the announcement of a new commercial plane
for 2008 deliveries, the 7E7, morale in the company has soared because of increased
competitiveness. Boeing’s decision about finance reminded us of the different
approach both General Motors and Ford have taken to the role and
importance of banking in their corporate results. Danny Hakim called this to our attention in The New York Times (7/22) (http://www.nytimes.com/2004/07/22/business/22motors.html)
when he commented on the second quarter results for both companies, “The
General Motors Corporation and the Ford Motor Company may be two of the
world's largest automakers, but they continue to make their money as banks.”
At the same time, their key competitor, Toyota,
generates significant profits from its core auto and truck manufacturing
operations. You wonder if the CEOs at GM and Ford think of themselves as
finance companies that build vehicles.
How do you create and maintain intense
focus on your work? When confronted with profitable, alternative activities
to your core business, how do you decide whether to pursue or avoid? Do you
tackle the toughest issues first, or spend a lot of time in warm up?
Time
Another lesson from
Lance Armstrong involves acquiring and maintaining discipline about time. Sally Jenkins, who co-authored two
books with Armstrong, Every
Second Counts, and It’s
Not About the Bike, provided a great profile in The Washington Post (7/25) (http://www.washingtonpost.com/wp-dyn/articles/A12141-2004Jul24.html).
“Time is Armstrong's obsession; he reflexively,
desperately clutches at it. It's a quality that has served him well both in
cancer and in racing. The Tour de France to him is a matter of meticulously
tabulating time vs. pain vs. self-denial, a kind of physical algebra. ‘It's a
mathematical equation,’ he says. He rehearses each crucial climb in the Tour
until he understands exactly how many seconds he can gain, what his heart
rate will be, how many calories he will burn, how much he needs to weigh, how
many watts he can generate and how long his body can stand it at that rate.
And yet clutching at time doesn't always serve him well in everyday matters.
Last spring we met at his home in Girona to do some
work. His marriage was failing, and he was frantic with worry over his
children. ‘Cancer never kept me awake at night,’ he said. ‘This keeps me
awake.’ He was clearly not training with the same ascetic devotion. (He ate
every biscotti in the house.) One afternoon we
wandered up the winding cobbled streets of Girona
to an old Roman wall that circled the city, offering views of the Pyrenees. It was just a few blocks from his house --
but he had never seen it before. He was almost distraught at the discovery
that something so beautiful was so close to him, and he hadn't had time to
notice it. ‘I can't believe this has been here,’ he said then. ‘I'm an
idiot.’ If there's one thing Armstrong could wish for, it's more time. Time
with his kids, whom he's been away from for the better part of three months
in pursuit of his sixth Tour win. ‘I'm not doing this again,’ he says. ‘I
don't want to and I won't. Luke swam across the pool, the girls started
ballet. I miss too much. I love two things, my kids and cycling. I'll find a
way to make it work.’” Every
executive chooses how to devote appropriate time to the right activities,
while trying to maintain a life beyond work. Executives at competitor
companies also make choices on how to use time, and the most successful
leaders manage and leverage time to engage in those activities that drive the
best results. We remembered a story from one of Armstrong’s books about his
choice on a rest day versus that by closest competitor Jan Ullrich. Given the cold and rain, Ullrich made a reasonable decision to prepare for the
next stage by reviewing videotape of the race route in his hotel room.
Armstrong got on his bike and spent hours riding the course. Guess who won?
How disciplined
is your approach to the choices you make in allocating your time? Within your
organization and your life, how do you “make it work?” How do you examine
your past choices about time to influence your future success? What do you
know about how your competitors allocate their time? Who’s more likely to
win?
Retirement
There’s one key choice
for riders during Le Tour: ride on with no hope of victory (but achieve some
personal goal) or leave the race, a decision called “retirement.” One of
Armstrong’s former teammates, and competitor, Tyler Hamilton, retired in the 2004 Tour after stage 13, having
come in fourth place in 2003, a race he finished while injured. Organizations
can face similar choice. Following past success, a time can come to “retire.”
The injured company in the news recently that made a retirement decision was AT&T which announced (7/22) (http://www.att.com/news/item/0,1847,13163,00.html)
that it “is shifting its focus away from traditional consumer services such
as wireline residential telephone services, and
concentrating its growth efforts going forward on business markets and
emerging technologies, such as Voice over Internet Protocol (VoIP), that can serve businesses as well as consumers.”
The history of AT&T stumbles in recent years is probably a case study in
business schools. This decision appears to face a competitive reality: other
players were better performers in meeting consumer expectations, and the
costs to compete were too high for AT&T to succeed. The baby Bells appear
to have a short term advantage that can be exploited, but they continue to
face long term fundamental problems. The smallest, Qwest, plans new ads to poach AT&T customers. We read in The New York Times (7/24) (http://www.nytimes.com/2004/07/24/business/24bell.html),
“The change has also fueled speculation that AT&T could become a takeover
target, industry analysts said. But they cautioned that potential suitors
would wait to see how AT&T's revenues and earnings change before
considering a merger with what was once the dominant long-distance company.
The three largest regional Bell
companies - Verizon Communications, SBC
Communications and BellSouth - are the most likely suitors, analysts said,
because each could easily afford AT&T at its current market
capitalization of roughly $11.13 billion.” One stage of the race may be over;
it might be time to perform in the mountains.
What is the impact of
decisions of your competitors on your performance? Are you prepared to
exploit short term opportunities? How do the short terms opportunities help
you resolve your long term challenges? Are you looking ahead to the future
stages that you need to win, or have you relaxed and started to coast in
short term malaise? When you think about possible consolidations, what are
the characteristics of partners that will increase your competitiveness?
Joy
Any
observer of this year’s Tour de France who saw the expressions on Lance
Armstrong’s face came away with two conclusions: he works hard and he loves what
he’s doing. Sally Jenkins commented in the profile referenced earlier, “What
happened over the last three weeks was that a 32-year-old man raced like a
boy, with a kind of rediscovered pleasure, as he won five stages and blew
past his competition. ‘The only way I can describe it,’ he said, ‘is that
it's like when you're 12 years old, and you and your five buddies all get new
bikes and you say, “Let's race.” And all you want to do is clobber your
buddies. It was like that.’” Executives who feel that way about their work
may overcome all competitive obstacles and achieve victory under difficult
circumstances.
How much do you enjoy the
work you do? How much pleasure do you receive from your work? Does your hard
work and sacrifice lead to satisfaction in the results you achieve? What
would make you feel like a kid again? Why aren’t you doing whatever that
is?
Follow-up
Here are
selected updates on stories covered in prior issues of Executive
Times:
Ø
In
the first issue of Executive Times,
April 1999,
we praised the Charles Schwab
Corporation business model for doing business on the Internet at low
prices, versus the hesitation of Merrill
Lynch to upset their financial consultants with pricing changes. We
haven’t checked back since the bubble burst, and note that in late July
Schwab announced (http://phx.corporate-ir.net/phoenix.zhtml?c=100728&p=irol-newsArticle&ID=593665&highlight=)
the resignation of CEO Charles Pottruck and the reappointment of Charles Schwab to the top job and a
plan to serve the needs of the “mass affluent.” Stay tuned.
Ø
The
last time we had something to say about former WorldCom CEO Bernie Ebbers
was in the April
2004 issue of Executive Times
when we told readers about an article that called attention to his hubris and
the belief that he could keep the company afloat no matter what. That same
article mentioned that his ticket away from jail time might be the fact that
he did not profit personally from the financial shenanigans at that company.
The latest update for those following his story is that MCI has sued him for
payment of outstanding loans, the proceeds of which he used to buy company
stock. For more, see The Washington
Post (7/10) (http://www.washingtonpost.com/wp-dyn/articles/A39854-2004Jul9.html).
Legacy
Conservation
The venture capital
business that we know today finds its roots in the actions of Laurance Rockefeller, who provided critical start
up funding in the 1930s for what became Eastern
Airlines. Three decades later, he became an early investor in both Intel and Apple. Along the way, he invested in hundreds of startups. Those
contributions alone provide the basis for a lasting legacy. Rockefeller,
though, went far beyond those venture activities, using his money to produce
lasting value. He provided critical momentum to the conservation and
environmental movements in America
during the last half of the twentieth century. He donated the family’s land
in Jackson Hole to the government, and 5,000 acres he donated on the Virgin Islands became a national park. In the 1960s he
helped politicians define the kind of America our affluence could
create, as shown by the health of the land, water and air. His biographer,
Robin Weeks said, “There have been more than 200 books about the Rockefeller
family. One may read all these books, some friendly, some angry, to discover
that there is one Rockefeller who is barely present in most of them. This is Laurance, who moves in and out for a page or so and is
then gone, neglected by an author who sometimes is in search of scandal or
the stuff of headlines, or whose interests are in politics, high finance, or
international affairs. As a result, most of these books have neglected the
Rockefeller who, in the tradition of grandfather and father, arguably has
moved and shaken to the most long-range purpose — the preservation of the
nation's natural heritage, of great historic landscapes. That preservation
and the resulting creation of a conservation ethic that is endurable,
bipartisan, and rooted in a consistent sense of values is a quieter but far
more significant achievement than much that is done in politics, education,
or business. Laurance Rockefeller chose this
quieter path early in life.” Thanks to him, this natural heritage remains for
us all. Laurance Rockefeller died in early July at
age 94.
Latest Books Read and Reviewed:
(Note: readers of the web version of Executive Times
can click on the book covers to order copies directly from amazon.com. When you order through these links, Hopkins
& Company receives a small payment from amazon.com. Click on the title to read the review or
visit our 2004 bookshelf at http://www.hopkinsandcompany.com/2004books.html).
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Title (Link to
Review)
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Author
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Rating
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Review Summary
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Purchase
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On Paradise
Drive: How We Live Now (and always have) in the Future Tense
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Brooks, David
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Paradocs. We advised readers to take a pass
on Bobos in Paradise four years ago. The new Paradise is neither serious enough thoughtful
sociology nor funny enough social commentary to warrant anything above a
mild recommendation.
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Crofton’s
Fire
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Coplin, Keith
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•••
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Hero. Fans of historical
fiction will appreciate this debut novel from 60 year old author, and the
portrait of an American soldier in the 1870s. A satisfying story.
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Sharpe’s
Escape: Spain and Portugal, 1810
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Cornwell,
Bernard
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Indomitable. 20th
novel featuring Captain Richard Sharpe rewards readers with the reprise of
familiar characters and the introduction of new heroes and villains, while
Sharpe behaves as expected: impulsive, imprudent and successful. Enjoy.
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Sweet
Land Stories
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Doctorow, E.L.
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••••
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Savory. Five well-crafted
stories with universal themes presenting readers with the opportunity to
think a little differently about life, love, power and alienation.
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The
Trouble Boy
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Dolby,
Tom
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Lite Lights. Another debut novel about
coming of age in New York City,
this time the twenty-something gay version. Some punchy writing.
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Edward
R. Murrow and the Birth of Broadcast Journalism
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Edwards,
Bob
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••••
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Pioneer. Fine biography
of a driven, hard-working visionary whose approach and methods for
broadcast journalism continue to be emulated by the best practitioners.
Includes transcripts of great broadcasts.
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The
Catholic Revolution
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Greeley,
Andrew M.
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•••
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Bursting. Informed
interpretation of decades of data provides insight into the root causes of the
current crisis in the Catholic Church. Data and observation lead author to
theory, and book conveys all three.
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An
Unfinished Season
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Just,
Ward S.
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••••
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What If? Finely crafted
novel with pages of perfect narrative lead readers to see the impact of one
summer’s formative experiences on a lifetime, and wonder what if things had
turned out differently.
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Why
I Love Baseball
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King,
Larry
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Balk. Brief and tedious,
rambling narrative full of song lyrics, quotes from players and managers,
names dropped and boring recollections of games and teams gone by.
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Death
By Meeting: A Leadership Fable About Solving the Most Painful Problem in
Business
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Lencioni, Patrick
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•••
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Conflict. Expected to
hate this book, but found ideas worth trying, despite lack of empirical
evidence. If you can put up with the fable, there are lessons to apply to
your own meetings.
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Remembering
Jack: Intimate and Unseen Photographs of the Kennedys
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Lowe,
Jacques
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Vigor. Take a break from
this year’s presidential campaign, and peek at images from 40 years ago
that you’ve never seen before.
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Waterborne
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Murkoff, Bruce
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Flows. Well-written,
expansive debut novel of the intertwined lives of three characters and the
building of Boulder Dam. Dramatic, powerful, seems as big as the dam
itself.
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The
Unnatural
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Nayes, Alan
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Creepy. Better medical
thriller than latest Robin Cook novels. An enjoyable, creepy story, perfect
for summer distraction.
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Centennial
Crisis: The Disputed Election of 1876
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Rehnquist,
William H.
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Robes. Supreme Court Chief
Justice provides backgrounds of justices, Tilden, Hayes and a context for
justices accepting extrajudicial roles, with striking parallels to the 2000
election.
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A
Hole in Texas
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Wouk, Herman
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Particles. Entertaining
romp into the world of science and politics through the love and passion of
captivating characters. Great summer reading from veteran talented writer.
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